JLR recovery set to have lifted economy in October despite pre-Budget nerves

A manufacturing rebound led by Jaguar Land Rover’s (JLR) recovery could deliver a lift to economic growth in October despite pre-Budget nerves weighing on businesses, economists think.

Official figures will show estimates for UK gross domestic product (GDP) on Friday December 12.

Some businesses have indicated that activity in the economy slowed in the lead up to the Budget, delivered on November 26, as speculation over possible tax measures grew.

But economists think that an improvement in manufacturing could help lift overall growth.

GDP fell by 0.1% in September, with the Office for National Statistics (ONS) reporting that a “marked fall” in car production during the month reflected the impact of a cyber attack on JLR.

The carmaker was forced to  pause production of its cars for more than a month after being targeted by hackers, having a knock-on impact for the wider sector and resulting in a costly recovery.

“Given that production resumed gradually from mid-October, there’s likely to have been a partial rebound in manufacturing output that month,” Andrew Goodwin, chief UK economist for Oxford Economics, said.

He is expecting a flat month for the services sector to leave GDP up 0.1% for October.

Economists for Investec are forecasting a slightly bigger increase of 0.2% for the month, which it said was “consistent with our view that the economy will have expanded by close to 1.5% over 2025 as a whole”.

The next dataset will be watched closely for any signs of the impact of uncertainty ahead of the Budget on overall activity.

Former Bank of England chief economist Andy Haldane said last month that speculation was partly to blame for data being weaker than economists were expecting for the third quarter.

He said the prolonged worries over the Budget and leaks over possible tax hikes had “caused businesses and consumers to hunker down”.

Business surveys have also suggested that firms were deferring spending until after the Budget and noticing some hesitancy from households about big purchases.

However, activity in the private sector grew in October with manufacturing returning to growth, according to an influential survey by S&P Global.